EE sees service revenue fall in 2012 following MTR, roaming cuts

EE, the UK’s largest mobile network operator in terms of subscribers, recorded 2.6% year-on-year decline in service revenues for the year ended 31 December 2012, although excluding the impact of regulatory-enforced reductions of mobile termination rate (MTR) and roaming charges, turnover was 2.7% higher than in 2011. For FY 2012 EE generated service revenues of GBP5.953 billion (USD9.43 billion), down from GBP6.112 billion in the previous fiscal year, while total turnover declined by 1.9% y-o-y to GBP6.657 billion. Adjusted EBITDA for the twelve-month period stood at GBP1.410 billion, representing a decline of 0.4% against FY11, with capital expenditures totalling GBP606 million in 2011, up from GBP567 million in the previous year.

With mobile subscriber numbers having fallen by 2.6% over the year, at 31 December 2012 EE had 26.846 million wireless accesses on its books, compared with 27.563 million at end-2011. However, EE revealed that 52% of its mobile subscribers are now on contracts compared to 48% a year ago. In line with the improved customer mix, EE also highlighted improved average revenue per user (ARPU), and having claimed that its post-paid users ‘generate five times higher ARPU than pre-paid customers’, it said that underlying blended ARPU in the fourth quarter of 2012 had increased by 3.9%. Fixed broadband customer numbers meanwhile fell by 29,000 to 693,000,with EE attributing this to the withdrawal of a free broadband promotional tariff; it claimed that it had registered underlying base growth of 8,000 net adds in the year for its fixed broadband offering.

Commenting on the results, EE’s CEO Olaf Swantee, said: ‘In the past year, we delivered solid financial performance, underpinned by good progress integrating the business and success in attracting high value customers. At the same time, we built a strong platform for growth, launching a new company, new network, new customer brand, new retail estate and being the first to provide UK consumers and businesses with 4G mobile services alongside fibre broadband.’